If you, like me, have been sold auction rate securities by Charles Schwab, you know they have refused to buy them back or make good on them. You probably also know that in 2009, then New York Attorney General Cuomo filed suit against Charles Schwab for a long list of violations of securities laws. You might remember that Schwab tried (and failed) to get the case into Federal court where its arguments would have presumably found a more friendly hearing.
All of this information you would have had to piece together from the occasional news report (from a financial website or paper willing to risk the wrath of the principled financiers from San Francisco).
But I have recently discovered that the NY state Civil Supreme Court has made proceedings from this case available online and will automatically email you updates on the case. You can even read the filings in the case — which I strongly recommend.
These documents are tough sledding for non-lawyers, but buried in the filings is the logic Schwab is using to avoid doing the right thing (and what almost every other downstream seller of these toxic assets has done).
See for yourself the the real Schwab — the Charles Schwab disowning responsibility for ruining people and small businesses — not the cuddly-talk-to-Chuck, we’re-your-pals Charles Schwab of the TV and newspaper commercials. Be sure not to miss the “memorandum of law” filed in August, 2010 by Schwab’s attorneys. This document lays out the arguments for Schwab’s motion (to be heard in February, 2011) for dismissing the case.
The NY courts website isn’t all that easy to use, but they get major props for putting everything online — giving important judicial proceedings like this light and air and making it possible for people like me to keep abreast of the case.
Here are some links and the all-important case number to enter into the eTrack system, once you have created a user id.
First, sign up for eTrack: http://iapps.courts.state.ny.us/webcivil/etrackLogin.
Next, go to Web Civil Supreme: http://iapps.courts.state.ny.us/webcivil/FCASMain
Select “index search” and enter case 453388/2009.
Then, click where indicated in this screenshot to open the case (click to see a larger image).
Finally, in the screen that pops up after selecting the case number, you can read documents filed in the case and, best of all, be notified by email of events (click for a larger image).
Let’s hope that the court in February is able to separate Schwab’s fallacious legal arguments from the overwhelming evidence of fraud contained in the original complaint and that the court will allow this case to proceed.
Oh, BTW, FINRA, where are YOU in all this? Still “investigating?”